By Dianna Wray
By Dianna Wray
By Sean Pendergast
By Casey Michel
By Cory Garcia
By Jeff Balke
By Craig Malisow
By Jeff Balke
What he's got to show for it are some mostly worthless stock options, memories of companies that had everything going for them except that indefinable something that makes them work and a few enemies. "I'm not a quiet man," admits the highly direct 32-year-old. "I tend to cause friction."
His nearest thing to a home run was a stint with a startup called iChat, later known as Acuity, a pioneer in the Internet instant messaging field. Pape was the ninth employee hired at iChat. Acuity made a lot of people rich when it was purchased last year by Quintus, a software company in Fremont, California. Pape, however, had already become crosswise with the senior management and quit, just as the company crossed the significant 100-employee threshold.
Pape may be mercurial, but he's got plenty of drive. He's working as a marketing consultant to yet another startup, plus kicking around some ideas for his own company. "I'm looking for seed money," he confides. Good candidates for investors might be some of his old colleagues. A friend from the old days at ABM Data Systems called the other day, Pape relates. The pal had just bought a vintage Mercedes 600 convertible, a massive car more closely associated with heads of state than private individuals -- and so rare and highly prized that its sales price can't even be guessed at. "I drive the same Altima I've had for seven years," says Pape. "Let's just say my track record is not stellar," he allows. "I'm hoping the trend may be shifting."
Oddest of all, those doing the best from the Austin tech gold rush may not be doing themselves any good. Sometimes even those who have what it takes, and have taken what the tech boom has to offer, wind up in worse shape. A condition known as sudden wealth syndrome is casting a pall over their good fortune. David W. Cramer, Ph.D., an Austin therapist and former president of the Capital-Area Psychological Association, says he has seen several patients for whom sudden riches has meant emotional torment.
"The struggles I've seen have been people compulsively buying big-ticket items," Cramer explains. "They'll be buying a new truck one week, a boat the next week and a house the next." For the majority of the population, to whom a new vehicle isn't necessarily cause for distress, Cramer adds that the problem seems to result from the difficulties of toting around all this loot. "The more money you have, the more encumbrance you have," he says.
Another issue is the sudden shock to the system created by the ability to buy anything. "All of a sudden, the limits are removed," he says. "That can bring a lot of fear." At the very least, it's a major adjustment, for which psychologists have a catch-all term, adjustment disorder. It refers to the process and problems of becoming accustomed to anything from the breakup of a marriage to the gaining of several thousand liquid stock options. Perhaps more to the point, sudden wealth changes people, and not necessarily the ones getting the wealth. "It becomes difficult to really relax and feel comfortable around people," Cramer says. "You never know when envy is going to spring up." The recently rich often get their feelings hurt when new friends turn out to be interested only in obtaining a loan. Even old friendships frequently fail to survive the pressure cooker of profound prosperity.
Of course, it's easy to make fun of unimaginably wealthy people who find their riches make them miserable. Cramer says it's no joke. "Most people accommodate pretty well to it," he allows. "But there are going to be a few people that if they already have some cracks, this will bring it out. Some people slip into suicide, or at least ideation about it."
There's some question about how Austin itself will handle its new wealth as a city, or even if it will hang onto it. "Absolutely, it's precarious," the veteran Lowenthal says of the current gold rush. If the stock market falls and stays down, the options used by startup firms to compensate employees will become worth less than they cost the workers, he notes. That could happen even at Dell. Every new employee gets options on 100 shares, says Dell spokesman Niesha Frank. But those options are exercisable at the price when the employee is hired.
As long as Dell's price goes up, those options become more valuable, in some cases more valuable than the $7.50 hourly starting wages on Dell's assembly line. If the stock goes down? "We don't speculate on that," says Frank.
As for the eggplant-tinted Nate Hess, the only ideation he's doing, as he mops up lunch at Manuel's, is about who he'll meet at Miguel's after work. In general, he's still upbeat about his chances for surviving the Austin tech boom unscathed. "The work's good, the life's good," he says, smiling through his beard and shrugging his purple-clad shoulders. "Sometimes there's nothing left to do but live happily ever after."
Find everything you're looking for in your city
Find the best happy hour deals in your city
Get today's exclusive deals at savings of anywhere from 50-90%
Check out the hottest list of places and things to do around your city